Information - United States v. David Butziger

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U.S. District Court for the District of Rhode Island · No. 1:20-cr-00072-MSM-LDA · Doc. 18 · 2020-08-27 · Docket on CourtListener

Summary

A criminal Information in United States v. David Butziger, No. 1:20-cr-00072-MSM-LDA, filed August 27, 2020 as Doc. 18 in the U.S. District Court for the District of Rhode Island. It charges one count of conspiracy to commit bank fraud under 18 U.S.C. § 1349, alleging that from about April 6, 2020 to about April 27, 2020 the defendant and a named co-conspirator sought Paycheck Protection Program loans from BankNewport. The Information describes four PPP loan applications, including one for Dock Wireless in the amount of $105,381.50, and IRS Form 941 filings it says listed wages that were never paid. It includes a forfeiture allegation under Federal Rule of Criminal Procedure 32.2 and is signed for United States Attorney Aaron L. Weisman, dated August 26, 2020.

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1 
UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF RHODE ISLAND 
UNITED STATES OF AMERICA 
v. 
DAVID BUTZIGER, 
Defendant. 
Criminal Case No. ________ 
In violation of 18 U.S.C. § 1349 
INFORMATION 
The United States Attorney charges that: 
COUNT 1 
(Conspiracy to Commit Bank Fraud) 
Introduction 
1.
At all times relevant to this Information, defendant DAVID BUTZIGER
(“BUTZIGER”) resided within the State of Rhode Island. 
2.
At all times relevant to this Information, co-conspirator David Staveley,
a/k/a “Kurt Sanborn,” a/k/a “David Sanborn” (“Staveley”) resided within the States 
of Massachusetts and Rhode Island. 
Entities Associated with Butziger and Staveley 
3.
Oakland Beach Restaurant Group LLC, d/b/a “Top of the Bay,” is a
Rhode Island corporation that was established on or about March 11, 2020. Defendant 
BUTZIGER is the registered agent for the corporation. The principal office for the 
corporation is listed as 898 Oakland Beach Avenue, Warwick, RI, the address of “Top of 
the Bay” restaurant. 
1:20CR72MSM-LDA
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4. 
Apponaug Restaurant Group, LLC was incorporated in the State of Rhode 
Island on or about November 25, 2019. Its listed principal office address is 3376 Post 
Road, Warwick, RI, the address of a restaurant named Remington House that has been 
closed since approximately November 2018. The property at this address was 
purchased by the Apponaug Restaurant Group, LLC on January 21, 2020. The listed 
managers of the Apponaug Restaurant Group LLC are S.S. and G.S.  
5. 
On The Trax is the name of a former restaurant located in Berlin, MA. It is 
owned by New Flat Penny, LLC, a Massachusetts company opened under the name of 
G.S. 
6. 
Dock Wireless is an unincorporated entity owned by BUTZIGER.  
The CARES ACT and the Paycheck Protection Program 
7. 
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a 
federal law enacted on March 29, 2020 designed to provide emergency financial 
assistance to the millions of Americans who are suffering the economic effects caused 
by the COVID-19 pandemic. One source of relief provided by the CARES Act was the 
authorization of up to $349 billion in forgivable loans to small businesses for job 
retention and certain other expenses, through a program referred to as the Paycheck 
Protection Program (“PPP”). In or around April 2020, over $300 billion in additional 
PPP funding was authorized by Congress. 
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8. 
The PPP allows qualifying small-businesses and other organizations to 
receive loans with a maturity of 2 years and interest rate of 1%. PPP loan proceeds must 
be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The 
PPP allows the interest and principal to be forgiven if businesses spend the proceeds on 
these expenses within 24 weeks of receipt and use at least 60% of the forgiven amount 
for payroll. The amount of PPP funds a business may receive is determined by the 
number of employees employed by the business and their average payroll costs for a 
period of 2.5 months. Businesses applying for a PPP loan must provide documentation, 
such as IRS Forms 940 and 941, to confirm that they have in the past paid employees the 
compensation listed on the application. 
9. 
The PPP is overseen by the Small Business Administration (“SBA”). 
Individual PPP loans are issued by private approved lenders (most commonly, banks 
and credit unions) who receive and process PPP applications and supporting 
documentation, and then make loans using the lenders’ own funds.  
10. 
At all times relevant to this Information, BankNewport was a financial 
institution doing business in the District of Rhode Island. The deposits of BankNewport 
are federally insured by the Federal Deposit Insurance Corporation.   
 
 
 
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The Conspiracy 
11. 
Beginning on or about April 6, 2020 and continuing through on or about 
April 27, 2020, in the District of Rhode Island and elsewhere, defendant  
DAVID BUTZIGER, 
together with David Staveley, a/k/a “Kurt Sanborn,” a/k/a “David Sanborn,” 
knowingly and unlawfully combined, conspired and agreed together and with each 
other to commit bank fraud, by knowingly executing and attempting to execute a 
scheme and artifice to defraud BankNewport and to obtain moneys, funds, assets, and 
other property owned by, and under the custody and control of BankNewport by 
means of false and fraudulent pretenses, representations, and promises, contrary to 18 
U.S.C. § 1344. 
Object of the Conspiracy 
12. 
It was the object of the conspiracy to fraudulently obtain forgivable PPP 
loans issued by BankNewport by falsely representing to BankNewport that 
corporations and entities under the control of the co-conspirators employed numerous 
individuals and had significant monthly payrolls.   
Manner and Means of the Conspiracy 
13. 
It was part of the conspiracy that co-conspirator Staveley established 
corporations and opened bank accounts in the name of his brother G.S. without the 
knowledge or consent of G.S. 
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14. 
It was a further part of the conspiracy that co-conspirator Staveley applied 
to BankNewport for forgivable PPP loans using the name, date of birth and social 
security number of his brother G.S., without the knowledge or consent of G.S. 
15. 
It was part of the conspiracy that on or about April 6, 2020, co-conspirator 
Staveley submitted a loan application under the PPP to BankNewport on behalf of 
Oakland Beach Restaurant Group LLC, d/b/a “Top of the Bay.” The loan application 
was in the amount of $185,750 and fraudulently represented that Oakland Beach 
Restaurant Group, LLC had 26 employees and an average monthly payroll of $53,000. 
In truth and in fact, Oakland Beach Restaurant Group LLC did not own or operate Top 
of the Bay restaurant and had no employees.  
16. 
It was a further part of the conspiracy that on or about April 6, 2020, co-
conspirator Staveley submitted a loan application under the PPP to BankNewport on 
behalf of Apponaug Restaurant Group LLC, d/b/a “Remington House.” The loan 
application was in the amount of $144,050 and fraudulently represented that Apponaug 
Restaurant Group, LLC had 18 employees and an average monthly payroll of $46,000. 
In truth and in fact, the Remington House restaurant had been closed since November 
2018 and Apponaug Restaurant Group, LLC had no employees.   
17. 
It was a further part of the conspiracy that on or about April 6, 2020, co-
conspirator Staveley submitted a loan application under the PPP to BankNewport on 
behalf of New Flat Penny LLC, d/b/a “On The Trax.” The loan application was in the 
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amount of $108,777.50 and fraudulently represented that New Flat Penny, LLC had 22 
employees and an average monthly payroll of $36,000. In truth and in fact, On The Trax 
restaurant had been closed since approximately March 10, 2020 after its liquor license 
was revoked. New Flat Penny, LLC had no employees when the PPP application was 
submitted.   
18. 
It was a further part of the conspiracy that on or about April 6, 2020, 
defendant DAVID BUTZIGER submitted a loan application under the PPP to 
BankNewport on behalf of an unincorporated entity called Dock Wireless. The loan 
application was in the amount of $105,381.50 and fraudulently represented that Dock 
Wireless had 7 employees and an average monthly payroll of $42,152.60. In truth and in 
fact, Dock Wireless has no employees and no wages were ever paid by Dock Wireless. 
19. 
It was a further part of the conspiracy that on or about April 10, 2020, co-
conspirator Staveley submitted to BankNewport an IRS 941 Form in support of the PPP 
application of Apponaug Restaurant Group LLC, d/b/a “Remington House.” The 941 
Form provided by STAVELEY fraudulently listed wages for Apponaug Restaurant 
Group LLC to be $138,000 for the first quarter of 2020 when, in truth and in fact, no 
wages were paid in this period. Defendant BUTZIGER created this false and fraudulent 
941 Form.  
20. 
It was a further part of the conspiracy that on or about April 13, 2020, 
defendant DAVID BUTZIGER submitted to BankNewport an IRS Form 941 in support 
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of the PPP application for Dock Wireless. The 941 Form provided by BUTZIGER 
fraudulently provided that Dock Wireless had paid 6 employees a total $126,500 during 
the first quarter of 2020 when, in truth and in fact, no wages were ever paid. 
21. 
It was a further part of the conspiracy that on or about April 14, 2020, co-
conspirator Staveley submitted to BankNewport an IRS 941 Form in support of the PPP 
application of Oakland Beach Restaurant Group LLC, d/b/a “Top of the Bay.” The 941 
Form provided by Staveley fraudulently listed wages for Oakland Beach Restaurant 
Group, LLC, to be $158,723.52 for the first quarter of 2020 when, in truth and in fact, no 
wages were paid in this period. Defendant BUTZIGER created this false and fraudulent 
941 Form.  
All in violation of 18 U.S.C. § 1349. 
FORFEITURE ALLEGATION 
Pursuant to Federal Rule of Criminal Procedure 32.2, notice is hereby given 
to defendant DAVID BUTZIGER, that in the event the defendant is convicted of  this 
Information, the defendant shall forfeit to the United States, pursuant to Title 18, 
United States Code, Section 2253(a), all property, real or personal, used or intended 
to be used to commit or facilitate the commission of the offenses of conviction. 
 
 
 
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8 
 
 
 
 
 
 
 
 
AARON L. WEISMAN 
 
 
 
 
 
 
 
UNITED STATES ATTORNEY 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Assistant U.S. Attorney 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assistant U.S. Attorney 
 
 
 
 
 
 
 
 
Deputy Criminal Chief 
 
 
Date: August 26, 2020 
 
Case 1:20-cr-00072-MSM-LDA     Document 18     Filed 08/27/20     Page 8 of 8 PageID #: 64

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